5 Tips For Supercharging Your Debt Repayments

Sometimes it’s not about how much money you make, but what you do with the money you have. If you’ve already got a good repayment routine but still feel a step behind, you might just need a few small financial tweaks to get yourself debt-free.

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1. Look for holes in your pockets

Start by taking a snapshot of your finances:
your earnings, regular expenses, credit card debts, bills, and anything else
that sees money changing hands. Write it down, especially if you’re juggling
more than a few bills and a credit card.

Though tracking your money "in your head" is a
valid day-to-day approach, getting everything down on paper (or in a
spreadsheet) list can work wonders when reviewing your overall financial health.

When you can see your income stacked against
your outgoings, you’ll find it easy to spot the holes in your pockets — i.e.
areas with unnecessary, outdated or excess expenses you can redirect towards a
debt. With plenty of simple tools available online (some for free), this exercise should only take a couple
of hours out of one evening.

2. Coordinate your repayment schedule

Schedule your automated payments so the money
comes out of your account the day after payday. Time this right, and you’ll
always have the funds to cover your bills and debts, saving on late fees and
dishonour fees, and minimising extra interest accrued on the account.

Unfortunately, through no fault of your own,
it’s far too easy to develop clashes in your repayment schedules — this usually
happens if your repayment dates were set up for you by your bank or the
business you owe money to, with no regard for when you actually get paid. When
changing jobs, this issue may pop up again if your new job pays you on a
different day.

But it’s a problem with a simple fix. You’ll get
a huge psychological boost from watching your debts go down without, seemingly,
having to think about it every month. It reduces the feeling of being
overwhelmed by "administrivia", and removes the "yawn factor" from the idea of
managing money. This in turn can get you excited about your savings goals, and
more engaged with your journey towards financial independence.

3. Motivate yourself with the potential savings

Think of how much you’ll save on interest over
time if you paid off your loans or credit cards as soon as possible —
literally, sit down and do the maths. Compare the interest paid over the full
loan term with the interest paid over, say, half that time. The difference
could be a matter of thousands.

Armed with an exact dollar amount, you’ll gain a
new perspective on just how valuable being debt-free actually is. It could be
just the motivation you need to focus your attention on a specific debt until
it disappears. Prioritise the debts you can pay off quicker, followed by the
ones that offer greater interest savings for early repayment.

And if you need a little more encouragement,
promise yourself a reward once you’ve cleared a debt. By then, you’ll be in a
better position to afford it.

4. Set a date and tell your friends and family

Choose a date for when you intend to pay off a
particular debt — a repayment calculator can be useful here,
factoring in the interest amount over time. With a specific date in mind,
you’ll have a concrete goal to work towards, making it easier to come up with
(and stick to) a realistic payment plan.

But don’t just think about it; talk about it
with your friends and family. Not only will this help them understand what
you’re facing, and respond supportively (for example, picking a "cheap and
cheerful" restaurant for your next outing), but you knowing others are aware of
your intentions can help cement your own belief in your actions, thus
strengthening your commitment to the cause.

There’s no shame in taking your money seriously.
It’s what enables you to take care of yourself and your loved ones day to day.
When you open up about your journey with people you trust, you may even find
others around you paying off a debt of their own. Together, you can cheer each
other on as you each work towards your financial goals.

5. Make a habit of checking in

If you’re working on a big debt, like a mortgage
or maxed-out credit card, the road ahead can often seem long and dull. We can
only stay motivated for so long before we lose sight of our purpose, so a
little reward every now and then can go a long way.

Between now and your debt settlement date, mark
on your calendar where you want your balance to be at regular intervals — for
example, every month or every season (3 months). These checkpoints serve as
smaller, easily attainable sub-goals that trigger a release of dopamine every
time you achieve them.

On its own, a "brain hack" like this can keep
you motivated step-by-step towards your bigger goals — this is the mechanism
behind habit, addiction, and developing new behaviours. But couple it with a
tangible prize, like a tasty treat or a night at the movies, and you reinforce
the idea that you can still have fun and enjoy life while being financially
responsible.

SocietyOne says...

We can help you to
consolidate existing debts into a low-rate personal loan, giving you a single
fixed repayment starting on a date you choose, and hopefully saving you money
in interest as well!

SocietyOne Australia Pty Ltd ACN 151 627 977 holds Australian Credit Licence No. 423660 and is an authorised representative of SocietyOne Investment Management Pty Ltd ACN 604 960 018, ASFL 477365. All loans are originated by Society One, issued by Australian Executor Trustees Limited ABN 84 007 869 794, Australian Credit Licence No. 240023 as custodian for the SocietyOne P2P Lending Trust and are signed by Society One under a power of attorney for and on behalf of Australian Executor Trustees Limited. Credit is subject to SocietyOne’s standard terms and conditions and lending criteria.